10-Q 1 d81558e10-q.txt FORM 10-Q FOR QUARTER ENDED SEPTEMBER 30, 2000 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange --- Act of 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000 or Transition Report Pursuant to Section 13 or 15(d) of the Securities --- Exchange Act of 1934 For the Transition period from to ----- ----- COMMISSION FILE NUMBER: 0-11779 S/M REAL ESTATE FUND VII, LTD. ---------------------------------------------------- Exact Name of Registrant as Specified in its Charter

ATTexas ~~JUNE 30, AT DECEMBER 31, 2000 1999 (UNAUDITED)~~ 75-~~-----------~~1845682 -----~~-------~~ ~~ASSETS Real estate, at cost: Land $ 962,216 $ 962,216 Building and improvements 7,890,916 7,863,701~~ ------------ ~~------------ 8,853,132 8,825,917 Less accumulated depreciation~~ (~~6,095,694)~~State ~~(5,941,608)~~or ------------ ------------ 2,757,438 2,884,309 Cash and cash equivalents 142,480 203,840 Cash held in escrow 154,869 54,365 Restricted cash - replacement reserve 46,352 39,414 Accounts receivable 6,874 5,097 Other assets 54,884 69,716 ------------ ------------ TOTAL ASSETS $ 3,162,897 $ 3,256,741 ============ ============ LIABILITIES AND PARTNERS' DEFICIT Liabilities: First mortgage note payable $ 6,312,979 $ 6,343,433 Accounts payable: Trade 32,084 19,022 Affiliates 42,165 51,354 Accrued expenses and other ~~liabilities~~jurisdiction ~~111,590~~of ~~46,860~~incorporation ~~------------~~of ~~------------ Total Liabilities 6,498,818 6,460,669 ------------ ------------ Partners' Deficit: General Partners (119,971~~organization) (~~118,651)~~I.R.S. ~~Limited~~Employer ~~Partners~~Identification ~~(11,080 units outstanding~~No.) (3,215,950) (3,085,277) ------------ ------------ Total Partners' Deficit (3,335,921) (3,203,928) ------------ ------------ TOTAL LIABILITIES AND PARTNERS' DEFICIT $ 3,162,897 $ 3,256,741 ============ ============

~~GENERAL~~5520 ~~LIMITED~~LBJ ~~PARTNERS~~Freeway, ~~PARTNERS~~Suite ~~TOTAL~~500, ~~------------~~Dallas, Texas 75240 ------------ ------------ ~~BALANCE AT DECEMBER 31, 1999 $ (118,651) $ (3,085,277) $ (3,203,928) Net loss (1,320) (130,673) (131,993)~~ ------------ --------~~----~~ ------------ ~~BALANCE~~(Address ATof ~~JUNE~~principal ~~30,~~executive ~~2000 $ (119,971~~offices) $ (~~3,215,950)~~Zip ~~$ (3,335,921~~code) ~~============ ============ ============~~

(972) 404-7100 -------------- (Registrant's telephone number, including area code) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- 2 S/M REAL ESTATE FUND VII, LTD.

~~THREE~~BALANCE ~~MONTHS~~SHEETS ~~ENDED~~AT ~~JUNE~~SEPTEMBER 30, ~~SIX~~2000 ~~MONTHS~~AT ~~ENDED~~DECEMBER ~~JUNE 30~~31, ~~2000~~(UNAUDITED) 1999 ~~2000 1999~~ ---------- ------~~----~~ ---------- -----~~-----~~ ~~INCOME~~ASSETS ~~Rental~~Real ~~$ 337~~estate,~~052~~ $at ~~331,126~~cost: Land $ ~~678~~962,~~108~~216 $ ~~657~~962,~~574~~216 ~~Interest~~Building and ~~other~~improvements 47,~~709 1~~937,~~842~~844 87,~~689 4~~863,~~836~~701 ---------- -~~---------~~ ---------- -~~---------~~ ~~Total Income 341~~8,~~761~~900,060 ~~332~~8,~~968~~825,917 ~~686~~Less accumulated depreciation (6,~~797~~201,539) ~~662~~(5,~~410~~941,608) ---------- -~~---------~~ ---------- -~~---------~~ ~~EXPENSES Property operating 190~~2,~~382 201~~698,~~436~~521 ~~345~~2,~~969 374~~884,~~780~~309 ~~Interest~~Cash ~~114,444~~and ~~115,469~~cash ~~229~~equivalents 112,~~162~~285 ~~229~~203,~~937~~840 ~~Depreciation~~Cash ~~and~~held ~~amortization~~in ~~106,817~~escrow ~~100~~186,~~775~~346 ~~209~~54,~~591~~365 ~~200,780~~Restricted ~~General~~cash ~~and~~- ~~administrative~~replacement ~~18,077~~reserve 1143,~~337~~159 3439,~~068~~414 ~~38,934~~Accounts ~~----------~~receivable ~~----------~~11,098 ~~----------~~5,097 ~~----------~~Other ~~Total~~assets ~~Expenses 429~~68,~~720~~159 ~~429~~69,~~017~~716 ~~818,790 844,431~~ ---------- -~~---------~~ ---------- -~~---------~~ ~~NET~~TOTAL ~~LOSS~~ASSETS $ ~~(87~~3,~~959) $ (96~~119,~~049)~~568 $ ~~(131~~3,~~993) $ (182~~256,~~021)~~741 ========== =~~=========~~ ========== =~~=========~~ ~~NET~~LIABILITIES ~~LOSS~~AND ~~ALLOCATED:~~PARTNERS' ToDEFICIT ~~the~~Liabilities: ~~General~~First ~~Partners~~mortgage $note ~~(880)~~payable $ ~~(960)~~6,298,605 $ (16,~~320)~~343,433 $Accounts ~~(1,820)~~payable: ToTrade ~~the~~21,828 ~~Limited~~19,022 ~~Partners~~Affiliates ~~(87~~47,~~079)~~294 ~~(95~~51,~~089)~~354 ~~(130~~Accrued expenses and other liabilities 176,~~673)~~385 ~~(180~~46,~~201)~~860 ----------- ----------- Total Liabilities 6,544,112 6,460,669 ----------- ----------- $Partners' ~~(87,959)~~Deficit: $General ~~(96,049)~~Partners $ (~~131~~120,~~993~~857) $ (~~182~~118,~~021~~651) ~~==========~~Limited ~~==========~~Partners ~~========== ========== PER LIMITED PARTNERSHIP UNIT~~ (11,080 ~~OUTSTANDING)~~units ~~$ (7.86~~outstanding) $ (~~8.58~~3,303,687) $ (~~11.79~~3,085,277) ~~$ (16.26)~~ ----------- ----------- Total Partners' Deficit (3,424,544) (3,203,928) ----------- ----------- TOTAL LIABILITIES AND PARTNERS' DEFICIT $ 3,119,568 $ 3,256,741 =========== ===========

STATEMENT OF PARTNERS' DEFICIT (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000

~~FOR~~GENERAL ~~THE~~LIMITED ~~SIX~~PARTNERS ~~MONTHS~~PARTNERS ~~ENDED~~TOTAL ~~JUNE 30, 2000 1999~~ ---------- --~~--------~~ CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (131,993) $ (182,021) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 209,591 200,780 Loss on retirement of asset 25,966 14,410 Increase (decrease) in cash arising from changes in operating assets and liabilities: Cash held in escrow (100,504) (80,832) Accounts receivable (1,777) 3,139 Other assets 11,775 (8,716) Accounts payable 3,873 (10,771) Accrued expenses and other liabilities 64,730 53,449 ---------- --~~--------~~ ~~Net cash provided by (used in) operating activities 81,661 (10,562)~~ ---------- --~~--------~~ ~~CASH~~BALANCE ~~FLOWS~~AT ~~FROM~~DECEMBER ~~INVESTING~~31, ~~ACTIVITIES:~~1999 ~~(Increase)~~$ ~~decrease in restricted cash - replacement reserve~~ (6118,~~938~~651) ~~51,099 Additions to real estate~~ $(~~105~~3,~~629~~085,277) $(~~126~~3,~~283~~203,928) ~~---------- ----------~~ Net ~~cash~~loss ~~used~~(2,206) ~~in investing activities~~ (~~112~~218,~~567~~410) (75220,~~184~~616) ---------- -~~---------~~ ~~CASH FLOWS FROM FINANCING ACTIVITIES~~ - ~~Payments of principal on first mortgage note payable (30,454) (29,679)~~ ---------- ----------- ~~Net~~BALANCE ~~decrease~~AT inSEPTEMBER ~~cash~~30, ~~and~~2000 ~~cash~~$ ~~equivalents~~ (61120,~~360~~857) $(~~115~~3,~~425~~303,687) ~~Cash and cash equivalents, beginning of period 203,840 274,735 ---------- ---------- CASH AND CASH EQUIVALENTS, END OF PERIOD~~ $ ~~142~~(3,~~480 $ 159~~424,~~310~~544) =========== =========== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for interest $ 229,162 $ 229,937 ---------- ---------- SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES: Write-off of fully depreciated building improvements $ 18,567 $ -- ---------- ----------===========

See accompanying notes to the financial statements. 2 3 S/M REAL ESTATE FUND VII, LTD. STATEMENTS OF OPERATIONS (UNAUDITED)

~~EXHIBIT~~THREE ~~NO.~~MONTHS ~~DESCRIPTION~~ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30, 2000 1999 2000 1999 ------------- ----------- ~~2a Voluntary Petition of Shearson~~-~~Murray Real Estate Fund VII, Ltd. to commence a case under Chapter 11 of the Federal Bankruptcy Code in the United States Bankruptcy Court for the Western District of Texas~~-~~Austin~~ ~~Division, as filed on June 6, 1989. Reference is made to Exhibit 2a to the Partnership's Annual Report on Form 10~~-~~K filed with the Securities and Exchange Commission on June 14, 1989. 2b Modified First Amended Plan of Reorganization of Shearson~~-~~Murray Real Estate Fund VII, Ltd. in the United States Bankruptcy Court for the Western District of Texas~~-~~Austin Division Case No. 89~~-~~11662~~-LC------- ~~filed February 20, 1990. Reference is made to the Partnership's Annual Report on Form 10~~-K------------ ~~filed~~INCOME ~~with~~Rental ~~the~~$ ~~Securities~~342,481 ~~and~~$ ~~Exchange Commission on April 12~~348,700 ~~1990.~~$ ~~3 Agreement of Limited Partnership of Shearson-Murray Real Estate Fund VII~~1, ~~Ltd.~~020,589 as$ ~~amended as of September 30~~1,006,274 ~~1983.~~Interest ~~Reference is made to Partnership's Form 8-K filed with the Securities~~ and ~~Exchange~~other ~~Commission on October 26~~5,122 ~~1983. Reference is made to Exhibit A to the Prospectus dated June 10~~2,149 ~~1983 contained in Amendment No. 3 to Partnership's Form S-11 Registration Statement filed with the Securities and Exchange Commission on June 10~~13,811 ~~1983. 10a Assignment and Assumption Agreement between Murray Management Corporation and Anterra Management Corporation for property management and leasing services dated January 1~~6,985 ~~1990.~~----------- ~~Reference~~----------- is----------- ~~made to Exhibit 10u to the Partnership's Annual Report on Form 10~~-K---------- ~~filed~~Total ~~with~~Income ~~the Securities and Exchange Commission May 15~~347,603 ~~1990. 10b Loan Agreement between S/M Real Estate Fund VII~~350,849 ~~Ltd. and General Electric Capital Corporation~~1, ~~dated December 3~~034,400 ~~1998. Reference is made to Exhibit 10.~~1,013,259 to----------- ~~Partnership's Form 8~~-K---------- ~~filed with the Securities and Exchange Commission on December 14, 1998. 27 Financial Data Schedule. 28a Pages A~~-16---------- ~~to A~~-18---------- ofEXPENSES ~~Exhibit~~Property Aoperating to195,977 ~~the~~150,587 ~~Prospectus~~541,946 ~~dated~~525,367 ~~June~~Interest 10115,434 ~~1983~~116,490 ~~contained~~344,596 in346,427 ~~Amendment~~Depreciation ~~No. 3 to Partnership's Form S-11 Registration Statement filed with the Securities~~ and ~~Exchange~~amortization ~~Commission~~107,984 on106,258 ~~June~~317,575 10307,038 ~~1983.~~General ~~Reference is made to Exhibit 28a to the Partnership's Annual Report on Form 10-K filed with the Securities~~ and ~~Exchange~~administrative ~~Commission~~16,831 on25,512 ~~May~~50,899 1264,446 ~~1988.~~----------- ~~28b~~----------- ~~Pages~~----------- 10-18---------- ofTotal ~~the~~Expenses ~~Prospectus~~436,226 ~~dated~~398,847 ~~June 10~~1,255,016 ~~1983~~1,243,278 ~~contained~~----------- in----------- ~~Amendment No. 3 to Partnership's Form S~~-11---------- ~~Registration Statement filed with the Securities and Exchange Commission on June 10, 1983. Reference is made to Exhibit 28b to the Partnership's Form 10~~-K---------- ~~filed~~NET ~~with~~LOSS ~~the~~$ ~~Securities and Exchange Commission on May 12~~(88,623) ~~1988.~~$ ~~99a Compromise Settlement Agreement between S/M Real Estate Fund VII~~(47,998) ~~Ltd.~~$ ~~and Federal National Mortgage Association~~(220,616) ~~dated~~$ ~~May 6~~(230,019) ~~1996.~~=========== ~~Reference~~=========== is=========== ~~made~~=========== toNET ~~Exhibit~~LOSS ~~99.1~~ALLOCATED: toTo the ~~Partnership's~~General ~~Quarterly~~Partners ~~Report~~$ on(886) ~~Form~~$ ~~10-Q~~(480) ~~for~~$ ~~the~~(2,206) ~~quarter~~$ ~~ended June 30~~(2,300) ~~1996~~To ~~filed with~~ the ~~Securities~~Limited ~~and~~Partners ~~Exchange~~(87,737) ~~Commission. 99b $5~~(47,~~830,000~~518) ~~Multifamily Note and Addendum~~(218,410) ~~dated May 30~~(227,719) ~~1996.~~----------- ~~Reference~~----------- is----------- ~~made to Exhibit 99.2 to the Partnership's Quarterly Report on Form 10~~-Q---------- ~~for~~$ ~~the~~(88,623) ~~quarter~~$ ~~ended June 30~~(47,998) ~~1996 filed with the Securities and Exchange Commission. 99c~~ $~~681,142~~ ~~Subordinate Multifamily Note and Addendum~~(220,616) ~~dated~~$ ~~May 30~~(230,019) ~~1996.~~=========== ~~Reference~~=========== is=========== ~~made~~=========== toPER ~~Exhibit~~LIMITED ~~99.3~~PARTNERSHIP toUNIT ~~the Partnership's Quarterly Report on Form 10-Q for the quarter ended June 30~~(11,080 ~~1996~~OUTSTANDING) ~~filed~~$ ~~with~~(7.92) ~~the~~$ ~~Securities and Exchange Commission~~(4.29) ~~99d~~ $~~6,400,000~~ ~~Promissory Note, dated December 3, 1998~~(19.71) ~~Reference~~$ ~~is made to Exhibit 99~~(20.155) of----------- ~~the~~----------- ~~Registrant's Form 8~~-K---------- ~~filed with the Securities and Exchange Commission on December 14, 1998.~~-----------

See accompanying notes to the financial statements. 3 4 S/M REAL ESTATE FUND VII, LTD. STATEMENTS OF CASH FLOWS (UNAUDITED)

See accompanying notes to the financial statements. 4 5 S/M REAL ESTATE FUND VII, LTD. NOTES TO THE FINANCIAL STATEMENTS The quarterly unaudited financial statements for S/M Real Estate Fund VII, Ltd. (the "Partnership") include all normal and recurring adjustments which are, in the opinion of management, necessary to present a fair statement of financial position as of September 30, 2000 and the results of operations for the three and nine months ended September 30, 2000 and 1999, cash flows for the nine months ended September 30, 2000 and 1999, and the statement of partners' deficit for the nine months ended September 30, 2000. Results of operations for the period are not necessarily indicative of the results to be expected for the full year. No significant events have occurred subsequent to fiscal year 1999, and no material contingencies exist which would require disclosure in this interim report per Regulation S-X, Rule 10-01, Paragraph (a)(5). The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. During the nine months ended September 30, 2000 and 1999, the General Partners or their affiliates were reimbursed for Partnership administrative and operating expenses, excluding property and construction management fees, in the amounts of $7,655 and $8,938, respectively. Property and construction management fees earned by an affiliate of the General Partners were $47,150 and $40,465 for the nine months ended September 30, 2000 and 1999, respectively. The financial information included in this interim report as of September 30, 2000 and for the three and nine months ended September 30, 2000 and 1999 has been prepared by management without audit by independent public accountants. The Partnership's 1999 annual report contains audited financial statements including the notes to the financial statements and should be read in conjunction with the financial information contained in this interim report. 5 6 S/M REAL ESTATE FUND VII, LTD. PART I, ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Liquidity and Capital Resources In order to improve the financial condition of the Partnership and provide funds for exterior improvements on the Partnership's property, Fifth Avenue Apartments ("Fifth Avenue"), a 198-unit apartment complex located in San Antonio, Texas, on December 3, 1998, the Partnership refinanced the mortgage note payable on Fifth Avenue (the "Refinancing"). In accordance with the terms of the loan agreement, the principal balance of the new mortgage totaling $6,400,000 is due January 1, 2009 and bears interest at a rate of 7.16%. The previous first and second mortgage had a combined balance of $6,259,810 at an average interest rate of 8.97%. In spite of having a slightly higher principal loan amount, the Partnership reduced its total annual debt service payments by approximately $170,000. Under the terms of the loan agreement, the Partnership is required to make fixed monthly payments of principal and interest in the amount of $43,269 commencing on February 1, 1999 until maturity on January 1, 2009, at which time the entire outstanding principal balance and accrued interest is due. Under the terms of the loan agreement, the Partnership was required to deposit with the lender $114,375 and make monthly contributions of $3,905 which are held by the lender pending application for the completion of certain required repairs to Fifth Avenue. At September 30, 2000, the balance in this replacement reserve account was $43,159. Cash and cash equivalents totaled $112,285 at September 30, 2000, compared to $203,840 at December 31, 1999. The $91,555 decrease is primarily attributable to fixed asset additions offset by an increase in cash provided by operations. Cash held in escrow increased to $186,346 at September 30, 2000 from $54,365 at December 31, 1999. The $131,981 increase is attributable to contributions to the insurance and real estate tax escrow, as required in the Partnership's loan agreement, which will be paid in the fourth quarter of 2000. Restricted cash - replacement reserve increased to $43,159 at September 30, 2000, from $39,414 at December 31, 1999. The $3,745 increase is attributable to the monthly contributions to the replacements reserve, offset in part by the release of $33,198 for replacements and completed required lender repairs in accordance with the terms of the loan agreement. Accounts receivable totaled $11,098 at September 30, 2000, compared to $5,097 at December 31, 1999. The increase is primarily attributable to the timing of tenant rental receipts. Other assets totaled $68,159 at September 30, 2000, compared to $69,716 at December 31, 1999. Accounts payable totaled $69,122 at September 30, 2000, compared to $70,376 at December 31, 1999. Accrued expenses and other liabilities totaled $176,385 at September 30, 2000, compared to $46,860 at December 31, 1999, an increase of $129,525. The change is primarily attributable to the timing of payments for real estate taxes. As a result of the recent Refinancing and anticipated reductions in general and administrative expenses, the General Partners currently expect funds from operations to be sufficient to pay all obligations for 2000, including debt service. In the event of any cash flow deficits, it is expected that such deficits will be funded by the Partnership's existing cash balances. However, there can be no assurance that the Partnership will have sufficient cash to fund such deficits. Results of Operations Operations resulted in net losses of $88,623 and $220,616 for the three and nine-month periods ended September 30, 2000, respectively, compared with net losses of $47,998 and $230,019 for the three and nine-month periods ended September 30, 1999, respectively. The increase in net loss for the three months ended September 30, 2000 from the corresponding period in 1999 is primarily attributable to an increase in property operating expenses. The decrease for the nine months ended September 30, 2000 from the corresponding period in 1999 is primarily attributable to an increase in total income and a decrease in general and administrative expenses offset in part by increases in property operating expenses and depreciation and amortization. 6 7 S/M REAL ESTATE FUND VII, LTD. Rental income totaled $342,481 and $1,020,589 for the three and nine-month periods ended September 30, 2000, respectively, compared to $348,700 and $1,006,274, respectively, for the corresponding periods in 1999. Occupancy at Fifth Avenue averaged approximately 93% for both the three and nine-month periods ended September 30, 2000, respectively, compared to 96% and 95% for the corresponding periods in 1999, respectively. The average rental income per occupied square foot at Fifth Avenue was $8.78 and $8.74 for the three and nine months ended September 30, 2000, respectively, compared to $8.60 and $8.40, respectively, for the corresponding periods in 1999. The increase in the average rental income per occupied square foot in 2000 is primarily attributable to increases in rental rates. Total expenses for the three and nine-month periods ended September 30, 2000 were $436,226 and $1,255,016, respectively, compared to $398,847 and $1,243,278, respectively, for the three and nine-month periods ended September 30, 1999. The increases for the three and nine-month periods in 2000 are primarily due to increases in property operating expenses. Property operating expenses consist primarily of on-site personnel expenses, utility costs, repair and maintenance costs, property management fees, advertising costs, insurance costs and real estate taxes. Property operating expenses for the three and nine-month periods ended September 30, 2000 were $195,977 and $541,946, respectively, compared to $150,587 and $525,367, respectively, for the three and nine-month periods ended September 30, 1999. The increases for the 2000 periods primarily are attributable to increases in repair and maintenance costs for apartment preparation, real estate taxes and loss on retirement of assets, offset in part by lower general repairs and maintenance costs and lower insurance costs. General and administrative expenses for the three and nine-month periods ended September 30, 2000 were $16,831 and $50,899, respectively, compared to $25,512 and $64,446, respectively, for the three and nine-month periods ended September 30, 1999. The decreases for the three and nine-month periods in 2000 are primarily related to lower legal fees. General Words or phrases when used in this Form 10-Q or other filings with the Securities and Exchange Commission, such as "does not believe" and "believes", or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. PART I, ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There have been no material changes in the information related to the market risk of the Partnership since December 31, 1999. 7 8 S/M REAL ESTATE FUND VII, LTD. PART II OTHER INFORMATION ITEMS 1-5 Not applicable. ITEM 6 Exhibits and reports on Form 8-K. (a) Exhibits - 2a Voluntary Petition of Shearson-Murray Real Estate Fund VII, Ltd. to commence a case under Chapter 11 of the Federal Bankruptcy Code in the United States Bankruptcy Court for the Western District of Texas-Austin Division, as filed on June 6, 1989. Reference is made to Exhibit 2a to the Partnership's Annual Report on Form 10-K filed with the Securities and Exchange Commission on June 14, 1989. 2b Modified First Amended Plan of Reorganization of Shearson-Murray Real Estate Fund VII, Ltd. in the United States Bankruptcy Court for the Western District of Texas-Austin Division Case No. 89-11662-LC filed February 20, 1990. Reference is made to the Partnership's Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 12, 1990. 3 Agreement of Limited Partnership of Shearson-Murray Real Estate Fund VII, Ltd., as amended as of September 30, 1983. Reference is made to Partnership's Form 8-K filed with the Securities and Exchange Commission on October 26, 1983. Reference is made to Exhibit A to the Prospectus dated June 10, 1983 contained in Amendment No. 3 to Partnership's Form S-11 Registration Statement filed with the Securities and Exchange Commission June 10, 1983. 10a Assignment and Assumption Agreement between Murray Management Corporation and Anterra Management Corporation for property management and leasing services dated January 1, 1990. Reference is made to Exhibit 10u to the Partnership's Annual Report on Form 10-K filed with the Securities and Exchange Commission May 15, 1990. 10b Loan Agreement between S/M Real Estate Fund VII, Ltd. and General Electric Capital Corporation, dated December 3, 1998. Reference is made to Exhibit 10.1 to Partnership's Form 8-K filed with the Securities and Exchange Commission on December 14, 1998. 27 Financial Data Schedule. Filed herewith. 28a Pages A-16 to A-18 of Exhibit A to the Prospectus dated June 10, 1983, contained in Amendment No. 3 to Partnership's Form S-11 Registration Statement filed with the Securities and Exchange Commission on June 10, 1983. Reference is made to Exhibit 28a to the Partnership's Annual Report on Form 10-K filed with the Securities and Exchange Commission on May 12, 1988. 28b Pages 10-18 of the Prospectus dated June 10, 1983, contained in Amendment No. 3 to Partnership's Form S-11 Registration Statement filed with the Securities and Exchange Commission on June 10, 1983. Reference is made to Exhibit 28b to the Partnership's Annual Report on Form 10-K filed with the Securities and Exchange Commission on May 12, 1988. 8 9 S/M REAL ESTATE FUND VII, LTD. 99a Compromise Settlement Agreement between S/M Real Estate Fund VII, Ltd. and Federal National Mortgage Association, dated May 6, 1996. Reference is made to Exhibit 99.1 to the Partnership's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996 filed with the Securities and Exchange Commission. 99b $5,830,000 Multifamily Note and Addendum, dated May 30, 1996. Reference is made to Exhibit 99.2 to the Partnership's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996 filed with the Securities and Exchange Commission. 99c $681,142 Subordinate Multifamily Note and Addendum, dated May 30, 1996. Reference is made to Exhibit 99.3 to the Partnership's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996 filed with the Securities and Exchange Commission. 99d $6,400,000 Promissory Note, dated December 3, 1998. Reference is made to Exhibit 99.1 of the Partnership's Form 8-K filed with the Securities and Exchange Commission on December 14, 1998. (b) Reports on Form 8-K - No reports on Form 8-K were filed during the quarter ended September 30, 2000. 9 10 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. S/M REAL ESTATE FUND VII, LTD. BY: SM7 APARTMENT INVESTORS INC. A General Partner Date: November 8, 2000 BY: /s/ Richard E. Hoffmann ----------------------- Name: Richard E. Hoffmann Title: Director, President and Treasurer BY: MURRAY REALTY INVESTORS VII, INC. A General Partner Date: November 8, 2000 BY: /s/ Charles W. Karlen --------------------- Name: Charles W. Karlen Title: Vice President 11 INDEX TO EXHIBITS

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